The biggest contributor to this value creation has been Welspun Corp, whose market capitalisation has risen from around ₹20,000 crore to nearly ₹70,000 crore over the period.
Two years ago, when BK Goenka spoke exclusively to CNBC-TV18, we asked him where he saw Welspun Group’s market capitalisation headed. At the time, the group was valued at around ₹45,000 crore.
Goenka had highlighted the group’s focus on the three Gs – Growth, Governance and Green.
So, what has changed?
One of the key drivers has been the strong recovery in Welspun Corp’s margin-accretive US business. The company currently has an order book of around ₹42,000 crore, providing revenue visibility over the next several years.
The company has also continued to invest through the current expansion cycle, with significant capex in the US and Saudi Arabia. Despite these investments, Welspun Corp remains net cash positive.
The value creation story is not just about the sharp increase in market capitalisation. It also reflects the group’s ability to invest through challenging cycles, execute projects and maintain a long-term focus on growth.
The journey from around ₹45,000 crore in market capitalisation two years ago to more than ₹1 lakh crore today marks a significant phase of value creation for the Welspun Group.
Welspun Corp
Welspun Corp and Perma-Pipe International have recently entered into a memorandum of understanding to establish pipe manufacturing and coating facilities in Jordan. The proposed facilities are expected to cater to water, oil and gas, and infrastructure projects in Jordan and the wider Levant region.
Meanwhile, brokerage firm Jefferies has initiated coverage on Welspun Corp with a ‘Buy’ rating and a price target of ₹3,250 per share.
Jefferies expects Welspun Corp to deliver a 17% volume CAGR and 32-33% EBITDA and EPS CAGRs over FY26-29E, driven by several factors.
These include a 51% capacity expansion across the US and Saudi Arabia, a rising contribution from higher-margin overseas businesses and an order book of ₹42,100 crore, equivalent to around 2.5 times FY26 revenue.
The brokerage expects Welspun Corp’s net cash to increase from ₹1,400 crore at the end of FY26 to ₹3,900 crore by FY29E.
Welspun Corp generated a 21% return on equity (ROE) during FY24-26, while Jefferies expects ROE to remain at 22-23% during FY27-29E.
